“We see better risk-reward ratio after the stock’s recent price correction of greater than 7 percent,” it said. “SPH REIT’s portfolio has consistently outperformed retail peers, supported by sticky occupancies while negative rental reversionary trends appear to be abating with the slow turnaround in retail sales.”

SPH REIT reported on Friday that its net property income for the second quarter ended February 28 was S$42.2 million, down 1.1 percent on-year, mainly on lower revenue from Paragon.

DBS noted that while rental reversions at SPH REIT’s two malls, Paragon and Clementi Mall, were negative 7.1 percent, it was an improvement from the previous quarter’s 10.6 percent drop.

“With expectations of higher tourist arrivals in 2018, we believe that the worst for the malls could potentially be over,” DBS said.

It also noted that SPH REIT has among the lowest gearing of the S-REITS and also has the visibility of a pipeline asset, The Seletar Mall, as well as the financial ability to acquire assets and increase distributions.